help

Income Statements under Absorption Costing and Variable Cost The demand for aloe vera hand lotion, one of numerous products manufactured by Smooth Skin Care Products Inc., has dropped sharply because of recent competition from a similar product. The com are currently completing tests of various new formulas, and it is anticipated that the manufacture of a superior product can be started on December 1, one month in the future. No changes will be need present production facilities to manufacture the new product because only the mixture of the various materials will be changed The controller has been asked by the president of the company for advice on whether to continue production during November or to suspend the manufacture of aloe vera hand lotion until December 1. has assembled the following pertinent data: Smooth Skin Care Products Inc. Income Statement-Aloe Vera Hand Lotion For the Month Ended October 31 Sales (400,000 units) $32,000,000 Cost of goods sold 28, 330,000 Gross profit $3,620,000 Selling and administrative expenses 4.270.000 Loss from operations $(600.000 The production costs and selling and administrative expenses, based on production of 400.000 units in October, are as follows Direct materials $15 per unit Direct labor 17 per unit Variable manufacturing cost 35 per un Variable selling and administrative expenses 10 per un Fored man tacturing cost $1,530,000 for October Fixed veling and administrative expenses 220,000 for October Sales for November are expected to drop about 20% below those of the preceding month No cant changes are anticipated in the red costs or variable costs per unit. No extra costs will be incurred in discontinuing operations in the portion of the plant associated with evera handlotion. The inventory of aloe vera handlotion at the beginning and end of November is expected to be inconsequential Previous Save and we Submit Test for Gradina 1. Prepare an estimated Income statement in absorption costing form for November for aloe vera handlotion, assuming that production continues during the month. Smooth Si Care Products Inc. Estimated Income Statement-Absorption Costing-Aloe Vera Hand Lotion For the Month Ending November 30 Cost of goods sold: Prepare an estimated com m enta ble costing form for November for at edhe Previous we and Subs Test for Grading Smooth Skin Care Products Inc. Estimated Income Statement Variable Costing-Aloe Vera Hand Lotion For the Month Ending November 30 Varble cost of goods 3. What would be the estimated loss in income from operations if the Production of Votion should be proc ed. There w e savings of Previous